ZURICH: The Swiss franc fell sharply against the dollar in early trading on Thursday, tracking the euro lower ahead of the European Central Bank's monthly report seen flagging downside risks to euro zone economies. Traders trimmed positions in the single currency ahead of euro zone economic growth numbers due later in the morning, which are expected to show that any recovery in the economic bloc remains fragile. While the franc has broken out of the narrow range in which it traded against the euro throughout 2012, it continues to track the single currency closely, as it has done since the Swiss National Bank imposed a 1.20 francs per euro cap in September 2011 to stave off a recession and deflation. The Swiss government announced steps on Wednesday to try to dampen a housing market boom that has been fuelled by ultra-low interest rates, immigration and Switzerland's appeal as a safe-haven for financial investors. The ECB report could suggest a longer recovery than anticipated only a month ago, Alpari market analyst Craig Erlam said in a note. "There could also be a reference to the impact of a stronger euro on growth in some members of the currency union, which is likely to reduce growth forecasts in the months ahead," Erlam said. The start of the G20 meeting later on Thursday is likely to see currency wars high on the agenda. The franc fell 0.5 per cent against the dollar compared to the New York close to trade at 0.9213 francs per dollar by 0752 GMT. The franc was steady against the euro at 1.2331 francs per euro.

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